Sanitary hardware business line profit is compressed

At present, the relationship between domestic sanitary hardware companies and their upstream and downstream is more of a competitive relationship. The supplier mainly gains benefits by increasing the price of input factors and reducing the quality of unit value. For production companies, raw material costs account for a high proportion of total costs, so the potential bargaining power of raw material companies is very strong. What is even more unfortunate is that due to the relationship of the national economic system, raw material companies are generally state-owned large-scale metallurgical groups. Their market position is stable and there are many buyers. Therefore, when the prices of raw materials such as aluminum and copper rose in recent years, most of the costs were passed on to Manufacturers.

The process gap between the domestic mid-market brands and the low-end market manufacturers is narrowing, so many small and medium enterprises are struggling to enter the mid-range market, and price competition is their most direct way, although domestic first-line brands are working hard. Closer to the high-end market, but due to the low quality of design and R&D, and inadequate patent protection, a large number of competitors imitate and plagiarize the domestic first-line brands also fell into the quagmire of price war. Terminal prices cannot be increased, raw material prices have risen, and the profits of sanitary ware manufacturers have been reduced.

Online, the most common terminal form of hardware and sanitary products is the building materials market, that is, retailers authorized by brand dealers face consumers directly by entering the building materials market. As of December 2012, the number of the national building materials market has exceeded 10,000, not only the product display and sales methods are the same, and there are usually many shops selling the same brand of goods in one market. The degree of market competition and the level of confusion can be seen in the market. . In recent years, Red Star Meikailong, Home Furnishings and other hypermarket channels have begun to introduce bathroom hardware products, relying on a strong sales network, their price-cutting ability on brand owners can not be ignored.

However, it is worth mentioning that the development of e-commerce channels is bringing changes to the supply chain of sanitary hardware companies. Because the channels are more flat, some of the saved channel costs benefit consumers, and the other part is backed by producers. Pressure eased. However, the proportion of online channels in sales of the entire industry is still relatively small, and the price competition on the line is also very fierce. Coupled with high delivery costs and promotion costs, the channel dividends will soon begin to gradually disappear.